31 Oct How Modern Technologies are Shifting the Structure of Every Organisation

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For years, business has used the same structure. Henry Mintzberg’s model demonstrates the structure which the majority adopt: this consists of the Strategic Apex (leadership), the Middle Line (middle management) and the Operating Core (workforce). New technologies are automating certain functions within business. But what has been the real impact of this on the structure of organisations?

THE AUTOMATED MODEL

We have created the flexible tools to remove the need for people to manually work on repetitive tasks. The advent of automation through mechanics, combined with cognitive technology has enabled businesses to automate a large part of the workforce.

We only need to look in the last 50 years at the impact; bank workers replaced by card machines, virtually all government administration replaced by self service via the internet, car manufacturing robotics, sales replaced with online shopping, contact centres replaced by self-service online functions. For the first time in history we possess a technology that can automate administration roles, manufacturing roles, sales roles, customer service roles, in fact, virtually all roles which sit in the Operating Core.

A RACE TO THE TOP

The impact on this has changed the fundamentals of the way we work. Going back to the Mintzberg model, imagine a measure showing the percentage of jobs in the ‘operating core’ which have been automated by machinery, computing or a combination of the both in the last 100 years. Whilst virtually impossible to measure, we have evidence in virtually all sectors that this percentage is huge. This removal in many industries has two effects. Firstly, this leaves the majority of ‘jobs’ in the Middle line or Strategic Apex, and secondly reduces the total number of opportunities to work in this traditional model.

What does this do financially? We have covered automation simply reduces costs hugely, short term making more profit and enabling huge price reductions of the output. Historically the roles in the Middle layer and Strategic Apex are paid more that those in the operating core, therefore this initial new found wealth through efficiency results in rewards for these individuals. The rich initially get richer.

AN EMERGING GAP

On the other side of the fence, the operating core have now found themselves without a job. In this unprecedented time, where virtually all organisations are doing the same, traditional jobs are scarce therefore options limited. This is leading to an increasing gap between the richer and the poorer. Secondly those finding themselves free from traditional work still need to support themselves or their families, resorting to self employment – resulting in more entrepreneurs than ever before, supporting jobs to the ever busy rich or unemployment though the state system.

Going back to the corporate model again following the Middle layer and Strategic layer, two things are happening. Firstly automation and efficiencies are moving up from manual operating core to these specialist roles. This results in a constant pressure on jobs, headcount and innovation. Secondly as efficiencies are introduced, prices reduced and competitive pressure is applied there’s now less margin or profit. This is starting to shake the traditional pay model.

THE IMPACT

In summary, we are seeing an overall increase in the gap between rich and poor, we are seeing increases, not in unemployment, but the mobility of individuals moving from the large organisation to smaller models and longer term we are seeing pressure on the mass roles at the Middle and Strategic apex. Increasing we may also see the Strategic apex becoming a very small, well protected haven for key people with huge rewards. All that said, these are choices we make and increasingly we are seeing purpose led or social enterprise businesses which fundamentally disrupt the standard hierarchy.

Finally the nature of work with the roles which are left is one of innovation, leadership, planning, insight and intellect, in other words the thought worker.

For more information on Ricoh’s work in transforming workplaces to fit modern requirements, contact one of our Workplace Services team here.

Ricoh Transform is no longer active. You can keep up to date with the latest thinking from Ricoh Ireland on our new blog,Ricoh Insights.